* UK rules leave room to allow coal mining
* Last deep coal mine closed in 2015
* Economics transformed by coal price surge
By Barbara Lewis
DRURIDGE BAY, England, Nov 27 In northeastern
England, a battle is raging between grass roots campaigners and
a company intent on digging a new open cast mine as world coal
A year after Britain closed its last deep coal mine and
pledged to phase out coal-fired power generation, the economics
of mining have been transformed.
Coal prices have risen by well over 100 percent this year to
$100 a tonne. Some mining stocks have risen even more, spurred
by U.S. President-elect Donald Trump's pledges to revive coal
and pull out of the Paris Agreement on climate change.
Some wonder how long the coal price surge will last, but in
Northumberland, the Banks Group is pressing ahead with plans for
a new mine despite opposition from local environmentalists.
Northumberland County Council agreed that Banks could
extract 3 million tonnes of coal by cutting an open cast mine
near Druridge Bay, a scenic windswept arc of white sand and
grassy dunes on the North Sea coast.
The government has "called in" the application, meaning
there will be a public enquiry next year.
Jeannie Kielty, who works on community relations for Banks,
says open cast is part of the social fabric of the northeast, an
area with a long history of coal mining.
"The benefits that come from these sites can't be
over-stated," she says. "We are frustrated with the call-in
because it delays us, but we still believe we can work the
On the other side of the argument is the Save Druridge Bay
campaign, which meets in the Drift Cafe, a haven for dog-walkers
and bird-watchers not far from Highthorn, the site of the
There is a hard core of eight campaigners, led by the cafe
owner Duncan Lawrence. It also has high-profile support from
television personality and comedian Bill Oddie, a keen bird
watcher who appreciates the pink-footed geese that winter among
"Suddenly someone wants to turn the clock back in some
really perverse way," Oddie said at a campaigning beach party in
May. "It's sacrilege."
COALS TO NEWCASTLE
Banks has overcome opposition in the past, appealing
successfully against a ban on developing another site in the
area at Shotton.
Situated on the Blagdon Estate owned by Matt Ridley, a peer
and Conservative politician who has said climate change has done
more good than harm, Shotton has been mined by Banks since 2008.
Banks says all the coal at Shotton and Highthorn can be
extracted by the government's 2025 deadline for phasing out
coal-fired power generation.
But the company plans to expand. In September, Banks
announced it was exporting coal to Spain and it has begun
canvassing opinion on a project to extract 800,000 tonnes of
coal at Dewley Hill near Newcastle.
British planning rules and the government's drive to close
coal-fired power stations do allow coal mining in some
The phase-out plans apply only to so-called unabated coal,
meaning a company that has the technology to reduce emissions
can carry on generating power with coal.
Exceptions can also be made if there is a risk that supplies
will be disrupted, a danger heightened by Britain's vote to
leave the European Union. That makes the country more reliant on
its own resources and less sure it can tap into the European
Big banks say they have stopped funding coal in Britain,
although they may consider projects in some emerging economies.
For shareholders, it made financial sense to get out of the
industry a year ago, when mining stocks and coal prices were
collapsing. Now the mining sector offers attractive yields at a
time when interest rates are at record lows.
Shares in Glencore, the world's biggest shipper of
seaborne coal, have risen more than 200 percent since January.
Fossil Free, which campaigns against fossil fuels, says the
shift towards a low carbon economy is irreversible. But while
580 international investment institutions pledged to abandon
coal in 2015, the group does not know how many have kept their
'FINELY BALANCED' DECISION
Northumberland County Council planning officer Frances
Wilkinson, who prepared the report recommending approval for
Highthorn, faced a different question.
She found the decision very difficult as the environmental
impact and the benefits were "finely balanced".
She was guided, she said, by a clause in planning
regulations that permission should not be given for coal mining
unless the proposal is environmentally acceptable or can be made
so, or "it provides national, local or community benefits which
clearly outweigh the likely impacts".
Banks says Highthorn will employ 100 people and generate 48
million pounds ($60 million) in related contracts and other
benefits to the community.
Last year Banks made an operating profit of 18 million
pounds ($22 million), down from 27 million pounds the previous
year because of a fall in the coal prices.
It says its break-even coal price is a commercial secret but
it can make a profit even when prices are low. The group also
includes a renewables arm and a property division.
For the Save Druridge Bay campaigners, the jobs and the
profits do not compensate for what is under threat.
Asked what is so special about Druridge Bay, cafe owner
Lawrence says it's the silence.
"It's an area of tranquillity undisturbed by noise," he
(Additional reporting by Simon Jessop and Susanna Twidale in
London; editing by Giles Elgood)